Seadrill (SDRL) shocked investors by eliminating its dividend–and now analysts are speculating about who might be next. Candidates include Transocean (RIG), Atwood Oceanics (ATW) and Diamond Offshore Drilling (DO). The Zephirin Group’s Longdley ‘Lenny’ Zephirin considers the possibilities:
"In our opinion, we believe that the following companies’ dividends are at risk in this challenging market: We are reiterating our SELL rating on Atwood Oceanics and lowering our price objective to $30.00 from $35.00 per share. We believe that it was pre-mature of management to initiate an annual dividend of $1.00 per share on a down market with the intent to increase it by 10% next year. We are also, reiterating our SELL on Diamond Offshore and price objective of $30.00 per share – the company pays a special dividend of $0.75 per share, which is at risk of being suspended. We are reiterating our SELL on Transocean Ltd. and reducing our price objective to $20.00 per share from $28.00. Lastly, we are reiterating our SELL rating on Ocean Rig UDW (ORIG ) and price objective of $8.00 per share."